This article originally appeared in the Financial Times, June 6, 2018. Read the original here.

A refusal by US oil companies including ExxonMobil and Chevron to disclose their US tax payments is undermining the international effort to fight corruption in natural resources industries worldwide, according to transparency campaign groups.

The chairman of the Extractive Industries Transparency Initiative, whose participants include 51 governments and most major western companies, said it was “disappointing” that the largest US oil groups “did not provide the leadership expected from them”, in the latest sign that the 15-year-old initiative is under strain.

The Trump administration withdrew the US from the initiative in November, even though it said at the time it continued to “value the EITI as a critical tool to promote transparency, increase competitiveness, and combat corruption around the world”.

Participants in the EITI commit to disclosing how much companies are paying, and governments are receiving, for natural resources developments, on the grounds that increased visibility of the flows of money will reduce opportunities for corruption and improve accountability.

Both Exxon and Chevron have disclosed their tax payments to other countries around the world but, like most other US companies, have chosen not to reveal their corporate tax payments to the US.

Several of the non-governmental organisations that are also involved in the initiative, including the Project on Government Oversight (POGO) and Oxfam, complained the EITI’s work was being damaged because Exxon and Chevron had refused to follow “this most basic aspect of compliance” with its standards, even though the companies are represented on its board.

Danielle Brian of the POGO said that if the companies were allowed to continue to keep their US taxes under wraps, without any adverse consequences, “that’s the beginning of the end of the legitimacy of the EITI”.

The issue will be debated at a board meeting of the EITI on June 28. In a statement responding to the complaints last week, Fredrik Reinfeldt, the chairman of the initiative, said Exxon and Chevron’s position was “disappointing”, but he recommended that they should not be removed from the board or face other punishment.

Zorka Milin of Global Witness said US companies set an example for others. “The US has always been a leader in anti-corruption and transparency policies, and it is sad to see some of that starting to unwind now,” she said.

Exxon said corporate tax returns “contain complex, proprietary and competitive information that nearly all companies choose to keep confidential”, and the US Internal Revenue Service had been explicit in telling the EITI that “corporate tax reporting in the US would be strictly voluntary”.

The company said some members of the EITI were trying to undermine the initiative “by attempting to remove other committed members who [hold] differing views of how to advance global transparency objectives”.

Chevron said it had a longstanding commitment to promoting revenue transparency, and disclosed other payments in the US such as its permit fees, but its tax payments were “confidential”.

Established in 2003, the EITI has 51 member countries, including large resource-holders such as Kazakhstan, Nigeria and the Democratic Republic of Congo, as well as the UK, Norway and Germany.

Oil companies have been vocal supporters of the EITI, and BP, Royal Dutch Shell, Total and Equinor are also represented on its board. Exxon and Chevron also backed the initiative from the beginning; Exxon said in 2008 that revenue transparency and accountability were “critically important”.

Campaign groups have suggested the reason the US companies will not disclose their payments to the IRS is because they are paying so little, or receiving rebates. Shell and BP have disclosed their tax payments to the US, and in 2016, a difficult year for the oil industry, Shell E&P received a rebate of $239m, while BP America received $16.6m.

Jana Morgan of the International Corporate Accountability Roundtable said: ”Why is the US the only country where Exxon and Chevron won’t disclose this information? . . . They don’t want US citizens to know if we are getting a good deal or not.”